Study does it: Navitas hints at growth in earnings
THE international education services provider Navitas is preparing to reap the benefits as Asian students once again flock to study in Australia.
Despite reporting a flat net profit of $35.1 million for the half year to December 31, Navitas says regional student enrolments are climbing and earnings should improve.
"What we've seen over the last three to four months is a very, very significant turnaround in terms of demand out of China," said the chief executive, Rod Jones, who also cited Vietnam and India as important markets.
"Streamlined visas, the potential to work in Australia once they've finished studying, these things are positives from a student perspective."
The company has signalled improved earnings this financial year and next. Profits are emerging from its recent restructure, while its university programs and English businesses are recovering and will support earnings growth. Much higher growth is expected from 2013-14, as student volumes continue to grow and margins improve.
Mr Jones said full-time enrolments were up 2 per cent in the first half as regulatory changes eased students' uncertainties in Australia and Britain. New student recruitment in Australia rose 7 per cent.
"Until we build up our new student numbers to offset the numbers of students flowing through the system, we're not going to see the uptick, but we're getting very close to that point now," Mr Jones said.
He denied the restructure of the professional and student recruitment divisions was a prelude to a sale, saying Navitas had dealt with issues surrounding the $2.5 million loss in its professional division.
"Certainly there were parts of the business we were disappointed with - what happened in the [professional] area came a bit out of left field," he said. "Most of the issues there have been dealt with in the first half, and moving forward we see recovery in the second half."
Navitas offers pre-university and pathway programs from 30 colleges in Australia, Britain, the US, Canada, Singapore, Sri Lanka, and Africa.
Its division in Germany, which accounts for 27 per cent of the company's offshore business, suffered a government funding cut last year.
Navitas declared a fully franked interim dividend of 9.3¢ a share, down from 9.4¢ previously. Its shares closed 5¢ lower at $4.90.